Top of the news for us this week was the announcement that four Chinese state banks are issuing RMB 25 billion in bonds for real estate purchases—that is, the system yet again growing debt piles to offset problems. Another sign of the times was news that second-hand home sales in Shenzhen have hit a 15-year low. The best view on property seems to be that China’s top city Shanghai is solid regardless of what happens, a handful of other cities will do okay, but elsewhere it’s going to get tough in the months and years ahead.
Next in line news-wise was Pfizer’s antiviral Covid pill getting import approval, which is significant because it marks a break from a reliance on homegrown vaccines and medicines. But the zero Covid policy continues regardless, and HK, which is reeling from an Omicron upsurge, is going to follow the mainland. The world, meanwhile, is moving towards an acceptance of the existence of the virus and its consequences, and that means that China, with its close to zero herd immunity level, is going to have keep its doors closed, until … when? A magic pill pushes Covid into history? it’s going to be a long while.
In other news, the China system is really taking the metaverse seriously, and local governments and state-backed entities are going big on investment into the virtual worlds. To understand what might emerge as a result, you have to start with Neal Stephenson’s 1992 novel Snow Crash.
Have a good weekend, and happy reading!
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